Richard Desmond is understood to be the front runner to buy Channel Five, in a £100m deal which could be signed as early as this week.

However, there are understood to still be two other bidders in the running, including Channel 4.

Desmond, the owner of the Daily Express, the Daily Star and OK! magazine, is understood to have tabled the highest bid for struggling Five. His bid presents the fewest potential regulatory issues and therefore potentially the quickest sale for parent company RTL.

Desmond, who has made it clear he has a £1bn pot to spend on acquisitions, was spotted at the offices of media regulator Ofcom on Thursday last week, fuelling the belief that he is serious about completing a takeover.

However, no deal has yet been signed, and Channel 4 and a US broadcaster, believed to be either Time Warner or NBC Universal, are understood to also be in the running.

"He [Desmond] doesn't represent any regulatory issues, he represents speed which is an important consideration," said a source with knowledge of the bidding process. "But it's not a done deal, he is not the only one still in the running."

In March RTL was forced to cut the value of Five by more than half, valuing at €112m, when just three years ago it was valued at €589m. Desmond's bid almost matches the book value of Five. The RTL chief executive, Gerhard Zeiler, has talked up the value of Five, but this has not affected the auction process, with Channel 4 thought not to have tabled a bid near his suggested price.

Channel 4 could afford to buy Five as it has cash reserves of just more than £200m, according to the company's latest financial report for 2009, but the final sale price for Five represents just a fraction of the financial commitment that a buyer will have to take on.

Issues with buying Five, which made losses of €41m last year, include onerous foreign programme deals such as a lifetime series commitment to contribute to the production of Home & Away and its TV sales operation increasingly suffering against larger rivals in the market.

It is thought that Channel 4's interest, which the new chief executive, David Abraham, has been keen to play down, has been strategically motivated in case key rivals such as BSkyB or ITV were to have made a serious move. If Desmond succeeds in taking over Five it will effectively leave the power relationship between the main commercial broadcasters unchanged.

Desmond is likely to look at an advertising sales deal with either Channel 4 or BSkyB to beef up its negotiating power with media agencies, which broker deals on behalf of advertisers. An outside opportunity could be to develop a cross-media ad sales proposition in conjunction with his media clout in the publishing sector. Desmond is already active in the television market through his Northern & Shell subsidiary Portland TV, which owns the Television X and Red Hot TV channels.

Big Brother producer Endemol, which is thought to have originally tied up with Northern & Shell, is understood to be out of the running. John De Mol, who was reportedly working with Greek broadcaster Antenna, who expressed interest through his investment company Cyrte Investments, is also understood to be out of the process.